Angola : Technical Assistant Report - Angola: Fuel Price Subsidy Reform the Way Forward.

Format:

Book

Government document

Author/Creator:

International Monetary Fund. Fiscal Affairs Dept.

Contributor:

International Monetary Fund. Fiscal Affairs Department, issuing body.

Series:

IMF Staff Country Reports; Country Report ; No. 2015/028

IMF Staff Country Reports

Language:

English

Subjects (All):

International Monetary Fund--Angola.

International Monetary Fund.

Petroleum products--Prices--Subsidies--Angola.

Petroleum products.

Energy industries--Angola.

Energy industries.

Energy policy--Angola.

Energy policy.

Fiscal policy--Angola.

Fiscal policy.

Technical assistance--Angola.

Technical assistance.

Physical Description:

1 online resource (38 p.)

Place of Publication:

Washington, D.C. : International Monetary Fund, 2015.

Summary:

This Technical Assistance Report on Angola highlights that the Angolan authorities’ plan to scale up priority spending will intensify fiscal pressures. The overall fiscal balance is projected to reach a deficit of about 4 percent of GDP in 2014, owing to a temporary decline in oil production. Besides being fiscally costly, fuel subsidies are inefficient and inequitable. They crowd out growth-enhancing spending?Angola’s spending in fuel subsidies is roughly the same as outlays in education and 42 percent larger than health-spending countries. In addition, they provide rent seeking opportunities and raise governance challenges. Furthermore, subsidies create incentives for overconsumption and in turn worsen traffic congestion and accidents?after malaria, road accidents are the second leading cause of death in Angola. Moreover, because most of the benefits of fuel price subsidies accrue to well-off households, they reinforce inequality?more than 50 percent of subsidies go to households in the top 20 percent of the income distribution. The authorities plan to reduce fuel subsidies gradually. This report provides a reform option that would eliminate fuel subsidies and result in fiscal savings of 2 percent of GDP.

Contents:

Cover; Contents; Preface; Executive Summary; Tables; 1. An Illustrative Action Plan for Subsidy Reform; 2. Action Plan: Cumulative Fuel Price Subsidies and Fiscal Savings; I. Introduction; II. The Costs of Fuel Price Subsidies; Figures; 1. Retail Fuel Prices and Subsidies, 2014; 2. Retail Fuel Prices in Selected Countries in Sub-Saharan Africa, 2012; 3. Parameters Used to Determine Subsides, 2014; 3. Consumption of Fuel Products by Sector, 2014; Box; 1. The Downstream Oil Sector in Angola; 4. Subsidies and International Oil Prices, 2006-20

5. Spending on Fuel Subsidies, Education, and Health, 2014III. Distributional Incidence of Fuel Price Subsidies; 6. Consumption by Fuel Product, Economic Sector, and Income Quintile, 2014; 7. Fuel Price Subsidies by Income Quintile, 2014; 8. Direct and Indirect Consumption of Fuel Products by Income Quintile, 2014; 9. Welfare Impact of Fuel Subsidy Reform; IV. Role of Social Assistance in Fuel Subsidy Reform; V. Illustrative Action Plan for Fuel Subsidy Reform; A. Policy Challenges: Lessons from International Experience; B. Stages and Tasks

4. Magnitude and Sequencing of Fuel Price AdjustmentsC. Illustrative Action Plan: Fiscal, Sectoral, and Inflationary Impact; 5. Fiscal Impact of Subsidy Reform; 10. Energy Intensity Index; Appendices; I. Fuel-Intensive Sectors; II. Distributional Incidence of the Fuel Price Subsidies; 6. Household Characteristics by Income Quintile; 7. Expenditure on Subsidized Fuel Products; 8. Distribution of Subsidies by Household Income; 9. Welfare Impact of Eliminating Price Subsidies; 10. Indirect Price and Real Income Effect by Sector

III. Reducing the Impact of Fuel Subsidy Reform on the Most Vulnerable: The Role of Social AssistanceIV. Estimating the Impact of Fuel Subsidy Reform on Domestic Prices; 11. Mapping between Input Output Tables and CPI Basket; 12. First-Round Effect of Fuel Subsidy Reform on Domestic Prices; References

Notes:

Description based upon print version of record.

Includes bibliographical references.

Description based on online resource; title from PDF cover (ebrary, viewed March 6, 2015).

ISBN:

9781484381861

1484381866

9781498302388

1498302386